The current rally in crypto has all the hallmarks of a 'hated rally'. A hated rally in the stock market is traditionally a term for sustained upward price moves that catch investors off-guard. Are we in a hated rallly?

So why can a rally in prices be hated? It is hated by investors who still on the sidelines with their money, as they were expecting lower prices. When the price starts unexpectedly moving higher, they hope for pullbacks, which not always come. Hence the term 'hated': they would have loved to have caught the bottom but are too late for that. 

A mirror image of a hated crash

The term 'hated crash' doesn't exist, probably because a crash is almost by definition disliked: we don't need a separate term for it. But it is good to note that the opposite of a hated rally happens of course all the time when investors are waiting to sell the top, but then the markets start unexpectedly falling. At some point during the unfolding bear market, investors are forced to sell to have at least some profits left. 

Examples of hated rallies in the past

After the Great Financial Crisis of 2008, most investors expected bad conditions for the stock market. Indeed, in European countries, stocks traded sideways for many years. But in the United States, stock prices would rally for more than a decade. The bears had underestimated the resolve of the American Central Bank to bail out the financial markets. Something similar happened in the months after the covid crash of March 2020. Financial panic was everywhere. Markets would sure go lower, right? In fact, no. Within 5 months after the short-lived crash, the S&P 500 reached record highs.

Are we in a hated rally?

Ever since January 2023, we have occasionally been writing about a possible sustained rally. In the max bearish circumstances of November 2022, many traders took short positions, betting on further price declines. When price refused to drop, these traders were squeezed out. Meaning that to cover their losses, they were forced to buy. This pushed the BTC price up 30% in January 2023. 

Unfolding banking crises in the US and Europe then helped to make people aware again of the Bitcoin narrative. At the same time, China started switching on the money printer, making global financial conditions less tight. With every seller having already left after a long bear market, the BTC price could only go in one direction: up. 

A crypto rally that looked like the present one is that of April 2019 - June 2019. After a brutal bear market, BTC quickly tripled in price from the 4.000 lows to around 12.000. It is important to notice though, that BTC retested the lows a full year later! It took another full year to enter real bull market territory. So be aware that something similar might happen now. So maybe the 'haters' will get another chance to jump in at lower prices.